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Which of the following statements is correct?
- a)Fixed costs vary with change in output
- b)If we add total variable cost and total fixed cost we get the average cost
- c)Marginal cost is the result of total cost divided by number of units produced
- d)Total cost is obtained by adding up the total fixed cost and the total variable cost
Correct answer is option 'D'. Can you explain this answer?
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Which of the following statements is correct?a)Fixed costs vary with c...
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Which of the following statements is correct?a)Fixed costs vary with c...
Answer:
Introduction:
In this question, we are asked to identify the correct statement among the given options. Let's analyze each statement and determine which one is correct.
Analysis of each statement:
a) Fixed costs vary with change in output:
This statement is incorrect. Fixed costs do not vary with changes in the level of output. Fixed costs remain constant regardless of the level of production. Examples of fixed costs include rent, salaries, insurance, etc.
b) If we add total variable cost and total fixed cost we get the average cost:
This statement is incorrect. The correct formula to calculate average cost is to divide the total cost (which includes both fixed and variable costs) by the quantity produced. Average cost represents the cost per unit of output.
c) Marginal cost is the result of total cost divided by the number of units produced:
This statement is incorrect. Marginal cost represents the additional cost incurred for producing one more unit of output. It is calculated by taking the difference in total cost between two levels of production and dividing it by the change in quantity.
d) Total cost is obtained by adding up the total fixed cost and the total variable cost:
This statement is correct. Total cost is the sum of both fixed and variable costs. Fixed costs remain constant, while variable costs change with the level of production. By adding these two components together, we get the total cost incurred in producing a certain quantity of output.
Conclusion:
Among the given statements, option 'D' is the correct statement. Total cost is obtained by adding up the total fixed cost and the total variable cost.
Introduction:
In this question, we are asked to identify the correct statement among the given options. Let's analyze each statement and determine which one is correct.
Analysis of each statement:
a) Fixed costs vary with change in output:
This statement is incorrect. Fixed costs do not vary with changes in the level of output. Fixed costs remain constant regardless of the level of production. Examples of fixed costs include rent, salaries, insurance, etc.
b) If we add total variable cost and total fixed cost we get the average cost:
This statement is incorrect. The correct formula to calculate average cost is to divide the total cost (which includes both fixed and variable costs) by the quantity produced. Average cost represents the cost per unit of output.
c) Marginal cost is the result of total cost divided by the number of units produced:
This statement is incorrect. Marginal cost represents the additional cost incurred for producing one more unit of output. It is calculated by taking the difference in total cost between two levels of production and dividing it by the change in quantity.
d) Total cost is obtained by adding up the total fixed cost and the total variable cost:
This statement is correct. Total cost is the sum of both fixed and variable costs. Fixed costs remain constant, while variable costs change with the level of production. By adding these two components together, we get the total cost incurred in producing a certain quantity of output.
Conclusion:
Among the given statements, option 'D' is the correct statement. Total cost is obtained by adding up the total fixed cost and the total variable cost.
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Which of the following statements is correct?a)Fixed costs vary with change in outputb)If we add total variable cost and total fixed cost we get the average costc)Marginal cost is the result of total cost divided by number of units producedd)Total cost is obtained by adding up the total fixed cost and the total variable costCorrect answer is option 'D'. Can you explain this answer?
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Which of the following statements is correct?a)Fixed costs vary with change in outputb)If we add total variable cost and total fixed cost we get the average costc)Marginal cost is the result of total cost divided by number of units producedd)Total cost is obtained by adding up the total fixed cost and the total variable costCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is correct?a)Fixed costs vary with change in outputb)If we add total variable cost and total fixed cost we get the average costc)Marginal cost is the result of total cost divided by number of units producedd)Total cost is obtained by adding up the total fixed cost and the total variable costCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is correct?a)Fixed costs vary with change in outputb)If we add total variable cost and total fixed cost we get the average costc)Marginal cost is the result of total cost divided by number of units producedd)Total cost is obtained by adding up the total fixed cost and the total variable costCorrect answer is option 'D'. Can you explain this answer?.
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